• With an implicit subsidy to American homeowners in the form of reduced mortgage rates, Fannie Mae and its sister government sponsored enterprise, Freddie Mac, squeezed out their competition and cornered the secondary mortgage market. They took advantage of a $2.25 billion line of credit from the U.S. Treasury.

• Congress, by statute, allowed them to operate with much lower capital requirements than private-sector competitors. They "used their congressionally-granted advantages to leverage themselves in excess of 70-to-1."

• The two GSEs were the only publicly traded corporations exempt from SEC oversight. All their securities carried an implicit AAA rating regardless of the quality of the mortgages.

• The Department of Housing and Urban Development set quotas for GSE investment in affordable housing.

• Encouraged by an inaccurate 1992 Boston Federal Reserve Bank study charging racial discrimination in mortgage lending, the two GSEs were strongly pressured to "lower their underwriting standards, particularly on the size of down payments and the credit quality of borrowers."

• Wall Street firms, homebuilders and the GSEs used money, power and influence to block attempts at reform. Between 1998 and 2008, Fannie and Freddie spent over $176 million on lobbyists.

• In 2006, Freddie paid the largest fine in Federal Election Commission history for improperly using corporate resources to hold 85 fundraisers for congressmen, raising a total of $1.7 million.

The editorial doesn't make clear that this report is a GOP report. It is amazing to me that there is so little reporting on the root causes of such a huge crash in our economy. I guess the reporters are all to busy covering the Michael Jackson story.

Tyburn

07-16-2009, 11:29 PM

http://www.ibdeditorials.com/IBDArticles.aspx?id=332121062189506

The editorial doesn't make clear that this report is a GOP report. It is amazing to me that there is so little reporting on the root causes of such a huge crash in our economy. I guess the reporters are all to busy covering the Michael Jackson story.
:laugh: :laugh:

those are some of the facts that led to the recession I believe :ninja:

As the Issa report points out, "the real tragedy of the government's affordable housing policy is the impact on average Americans, particularly those of modest means.

"Millions of these borrowers, who were supposed to have been helped by federal affordable housing policy, have now been forced into delinquency and foreclosure, destroying their asset base, their credit, and in some cases their families."